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Incentives behind the rapid growth of EVs in the company car market should continue, despite demand for the vehicles from the sector currently far outstripping that from retail buyers, according to the BVRLA.
The rental and leasing industry body's director of corporate affairs Toby Poston, speaking at its Fleets in Charge conference, said there were strong reasons for measures such as very low company car tax BIK rates to be maintained.
The conference coincided with the publication of the BVRLA's latest Road to Zero Report Card, looking at the road transport industry's progress towards decarbonisation.
According to the report - which awards traffic light scores to different elements of decarbonisation - the business lease car market merits a 'green' rating, while the personal leasing and used markets are rated 'amber', and rental demand is rated 'red'. The report itself warns that the provision of strong tax incentives for company and salary sacrifice EVs alone has left the overall market "dangerously imbalanced".
When asked by Business Car if the BVRLA was concerned the government might address this imbalance by switching funding away from electric company car incentives in favour of supporting the retail market, Poston said: "We would say you need to keep incentivising the company car market for some very good reasons. They are the people that invest in new technology first. They make rational, cost-based decisions, they are a vital provider to the nearly-new used market which is going to be hugely important, and they do the most mileage, so if you've got this goal of tackling emissions you should definitely focus there.
"I am sure [the government] are going to be thinking long and hard. Cliff edges don't work well, so I would definitely advise them not to suddenly go from a strong incentive at the moment to back to the level they were at four to five years ago where it was actually sending the wrong signals, and you end up with people saying 'I don't want a low-emission company-provided car, I'm going to go off and use my old banger'."
Poston said he was encouraged that the car industry did not seem to be calling for electric company car incentives to be refocused.
He said: "I think we are really pleased [to hear] from the SMMT that they didn't hit the company car market and say you should take away that incentive and give it to the retail market.
"They were very much 'look how well that's working, we need some more of that elsewhere', whether in the new retail market or used retail market. We think both, actually."
On the subject of the used EV market, another speaker at the conference, Auto Trader head of strategy and insights Marc Palmer, said there were some encouraging signs.
He said: "We have seen a big increase in [used EV] supply and a big increase in enquiries and demand. Many more enquiries than a year ago, in fact it's trebled its power on the platform.
"That has been driven largely by a big increase in oversupply at the start of the year, we saw then that the time for those cars to turn lengthened, and prices then dropped, demand was stimulated."
Palmer described the used EV market as being in a "very, very immature state", and cautioned that there were still potential pitfalls ahead.
He said: "The risk is that if there is a lot of oversupply again, prices drop - when prices of used cars drop in the retail market, somebody somewhere starts to worry about the future value of those cars. What then happens is the depreciation obviously is greater, the balance to fund a new car gets greater, so what we need is a really healthy balance between supply and demand in the used market."
Palmer also warned that wider consumer demand for EVs was still shaky.
He said: "We've conducted some recent research, [and found that] fewer than half of consumers thought an electric car would fit into their lifestyle
"Demand to date has been driven by affluent people, with the means to charge and to fund. We are really worried about mainstream adoption.
"People are looking for reasons to not do it. The majority of people are still not on board."
Another subject at the conference was the state of charging infrastructure - with further legislation to promote fleet-friendly facilities a key recommendation of the BVRLA's report.
Ian Johnston, CEO of Osprey Charging Network and chair of charging industry body ChargeUK, said that work was being carried out on bookable charging slots - a common fleet wish-list item.
He said: "A big challenge for us when we are trialling reservations now is what is the etiquette? What do we do with penalties, how do we fine people?
"So, I think there needs to be more collaboration between the charging networks and fleets to make this happen, but I think from my perspective in the next six months you'll see pilots going live of this, and you'll see new charging hub concepts for fleets coming."
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